New Delhi, June 24 -- For most salaried employees, the deduction of tax at source (TDS) from their monthly salary marks the end of their tax obligation on that income. But what happens if an employer deducts tax from salary and then fails to deposit it with the government?

Can the Income Tax Department deny the employee credit for that tax and raise a fresh demand?

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has answered this question in favour of taxpayers, ruling that an employee cannot be denied TDS credit merely because the employer failed to deposit the deducted amount with the government.

The case involved an employee of Trimax IT Infrastructure & Services Ltd. who filed her income tax return for Assessment Year ...